SpiceJet is back in limelight as the existing promoters, the Marans of Sun Group, have decided to pass on the ownership and control of the airline to Ajay Singh, who co-founded the airline in 2005.
A day after the SpiceJet board approved the transfer of ownership and management, SpiceJet stock surged 10 per cent and got locked in the upper circuit, indicating optimism among investors on the revival of the budget airline.
The stock closed at Rs.20.50 on BSE, up 9.92 per cent.
Mr. Singh, with about 5 per cent stake in the airline, is taking control of SpiceJet with the help of financial investors who together will invest $250 million.
Details of the financial dealings have not been made public.
The Ministry of Civil Aviation, which has been approached by SpiceJet for the change in ownership, is likely to give its nod by early next week following which the new owners would start running the airline and implement their strategy.
According to people familiar with the development, the Marans will transfer their entire holding of 59 per cent to the new investors led by Mr. Singh. Whether they will get any money or pay more is yet to be made public. Suffering huge losses in running the airline, the Marans were keen to exit.
SpiceJet, on Thursday, said its board took on record the proposal of the principal shareholder and promoter Kalanithi Maran and KAL Airways to transfer the ownership, management and control of the company to Mr. Singh.
This is in accordance with the ‘Scheme of Reconstruction and Revival for the takeover of ownership, management and control of SpiceJet Ltd.’, which has been filed before the Ministry of Civil Aviation for appropriate action.
“Failure of an airline with 17 per cent market share is the last thing our beleaguered aviation sector needs. SpiceJet’s revival is good for passengers, employees, lenders, suppliers and the industry as a whole,” said Amber Dubey, Partner and India Head of Aerospace and Defence, KPMG.
He felt that Mr. Singh would have to rework SpiceJet’s fleet, network and people strategy. “Given the right support, the airline can rebuild itself over the next 8-12 months into a lean, mean and profitable airline,” he said.
